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one's due, or the lawful demand of one's right. In French, an action signifies a share in a public Co.; and the shareholder is termed an "actionary.' ACTIONS UPON POLICIES OF INS. Many nice and curious legal questions from time to time arise when it becomes necessary to sue upon a policy of ins.; or rather did arise, for recent legislation has done much in this direction. As this is not a treatise upon the law of Ins., no more will be said upon the subject than is necessary to the general understanding of the points which either did recently or do still arise, when a policy of ins. has to be sued upon in a court of law.
Originally actions on marine policies were brought in the POLICIes of Ins. Court, founded with a special jurisdiction in 1601-reign of Elizabeth. Marshall says, that these policies being marine contracts, the law which regulates them is considered in most of the commercial states of Europe as a branch of Marine Law; and, therefore, where no commercial tribunal is estab., questions arising on this contract generally belong to the jurisdiction of the Court of Admiralty. In Scotland such actions are in the first instance a subject of Admiralty jurisdiction. It does not appear that in England Courts of Admiralty have ever had jurisdiction in questions of insurance; and since the abolition of the Policies of Ins. Court, actions upon policies are brought in our common law courts. Courts of Equity have no special jurisdiction in cases of Ins., although they will afford relief where their special interference becomes necessary; and in case of disputes between the members of such Asso. themselves, the Courts of Equity alone have jurisdiction.
When it is necessary to enforce payment of the sum assured in a Court of Law, the answer to the question, against whom the action is to be brought, will depend upon the constitution of the particular office, and the form and provisions of the policy upon which the demand arises. Since the Common Law Procedure Act, 1852, the form of action ceases to be essential; but the question, who are the proper defendants, is equally important as before.
When the Co. is incorp. either by Royal Charter or Act of Parl., the policy will be under common seal, and the action must be brought against the corp. as such, in which case it must appear by attorney authorized under the common seal; and execution can be levied upon the partnership property alone.
When the policy is issued by a Co. estab. prior to the Ins. Stock Cos. Regis. Act (1844), the action may be brought against the Directors signing the policy, as if upon a covenant or undertaking by them.
When a private Act has been obtained, it will be convenient to proceed in accordance with its provisions; but unless the terms of the Act are imperative, it does not follow that a claimant must do so: on the contrary, he may still proceed against parties executing the policy, or against any individual shareholder.-Bunyon.
Where a pol. is not under seal, an action may be maintained against the subscribing, or any other Directors or members. But when a pol. is under seal, those only who are parties to it can be sued upon it. Thus the Directors or Trustees signing must be sued ; and their having resigned office before the action be commenced will not stay the action.
In Equity also the Directors subscribing the pol. will, in the first instance, be the proper parties to represent the Co. either as plaintiffs: as when a bill is filed praying that the pol. may be delivered up as cancelled; or as defendants, upon the refusal of the Co. to satisfy a claim thereon.
In the case of a Co. registered under the Cos. Act, 1862—that is, Lim. Liability Cos.all actions must be against the Co. in its own name, according to the provisions of the Act.
Prior to 1833 no interest could be recovered on a principal sum sued for under the pol. of ins. Since the passing of the 3 & 4 Wm. IV., c. 42, s. 29, in that year, a jury may now add interest, after the time stipulated for payment in the pol. has passed, at their discretion. In the case of lost pol., upon which in consequence the Co. refuses to pay, no interest will accrue.
Where the pols. sued upon have been assigned-See ASSIGNMENT OF POLICIES.
Where the Co. is plaintiff, matters are much more simple. The action is brought either in the name of the Co. itself, or its proper officers, or as its own constitution or the law may direct. What we have already said will be a sufficient general indication of the points to be considered. [See ARBITRATION.]
ACTIVE LIFE Assu. Loan, ENDOWMENT, AND REV. INT. Co., founded in 1839, with an authorized cap. of £500,000, in 10,000 shares of £50. Its promoters endeavoured to popularize Life Ins. by proclaiming as a fact that "not more than one head of a family out of 62, or in all only about 80,000 persons, have as yet adopted the means presented to them of providing by Life Ins.," etc. They estimated that 500,000 possessed the pecuniary means of availing themselves of Life Ins., and their not doing so "affords a striking view of the improvidence of mankind." The managing Director was Mr. James Wemyss; the Actuary, Mr. N. Welton. The prospectus further stated that "the only data upon which life contin. can be calculated may, and probably will, become progressively inapplicable through the efforts of advancing civilization and improvements in physiological science." This was not encouraging to proposed insurers. In a word, the management was too clever, and their bantling became abortive.
ACTIVE SERVICE.-The engagement in operations against an enemy by persons in the naval, military, or allied forces. All Life offices refuse to ins. officers and others in the army and navy during "active service" at the ordinary rates; and many offices appear to reject such risks altogether. We may here notice a few of the more notable exceptions to this last rule. The first we have met with was that of the Crown Life. In its orig. prosp. (1825) it announced that it had acquired the requisite data "for calculating a scale of prems. proportionate to the add. risks arising from actual service, and from sea and climate," and intended to charge "moderate and corresponding rates" for such risks. [CROWN LIFE.] The Royal Naval and Military Life (1837) also made a special feature of the acceptance of risks of this class--see details in our hist. of that office. During the Crimean War the Accidental Death Co. ins. officers against death in action, at a special rate of £5 5s. p. c. Many offices which do not accept lives likely to enter upon active service, will yet quote a prem. to cover the risk in the event of the insured being called into service. The extra prem. in
such cases is necessarily high. [WAR RISK]. ACTS OF PARLIAMENT.-We believe every Act of Parl. bearing upon the subject of Ins. in any of its branches or incidents will be found quoted in this work. We had intended giving a schedule of them; but they number many hundreds, and space forbids. The task of reading, classifying, and condensing them all has been very great; but the result we think worthy of the labour. The hist of Ins. could never be written without this being done. We generally append the chronological date in citing an Act, which we believe will be found of great convenience. ACTUAL SERVICE.-See ACTIVE SERVICE. ACTUARIAL.-Pertaining to the profession or occupation of an Actuary. ACTUARIAL ESTIMATES.-In 1859 Mr. Charles Jellicoe brought before the Institute of Actuaries a paper On the rationale of certain Actuarial Estimates. The purpose of this paper was to show that while there is always a difference between the purchasable and saleable values of properties held for life and in reversion, such difference is not to be regarded as merely arbitrary; but is based upon reasons and principles which are well understood, and should be uniformly acted upon. Assu. Mag., vol. 8, p. 310. ACTUARIAL INVESTIGATIONS.-An Actuarial Investigation is the process employed periodically in the conduct of the affairs of a L. or Annu. Asso., with a view either to test its bare solvency, or more generally and more happily, to ascertain what surplus there may be for distribution after every proper provision has been made for the outstanding liabilities of all kinds.
The reasons why such investigations are necessary, as distinguished from their objects, arise out of the peculiar nature of L. Ins. contracts, and the lengthened period over which they generally extend. Dr. Farr says: "The commercial balance-sheet, in the most correct form, fails to present a correct view of the condition of a L. Office transacting ordinary bus. ; as its liabilities are distant, contingent, and every year vary in value" -hence a special mode of treatment has been devised which it is our present purpose to explain. Mr. Neison says: "No balance-sheet that I am capable of comprehending would be available for the purpose of showing the actual condition of an office in the same manner, as such a thing would be in the case of a banking house. Mr. Finlaison declares that "From the largest office in England to the smallest benefit club there is no certainty whatever in relying upon any Tables without periodic investigations." Mr. Morgan observed, in one of his eloquent addresses, what signify premiums, however correctly computed, "if no means are provided for ascertaining, at proper intervals, the real state of the inst., and for disposing of its profits without endangering its security, either by a direct or an indirect invasion of its capital?"
Actuarial Investigations are now made compulsory under sec. 7 of Life Assu. Cos. Act, 1870. We detail its requirements under ACTUARIAL REPORT. [BONUSES, mode of ascertaining.] [VALUATION for SURPLUS.]
In the U.S. the Ins. Commissioners or Superintendents of the several States have specific or assumed power to investigate the affairs of the various offices transacting bus. within those States. We may quote a sec. from the Ins. Law of California, passed 1868, as furnishing a type of the powers given :
SEC. 5.-The Ins. Commissioner shall have power to investigate and inquire into the bus. of ins. transacted in this State; and if any person engaged in the bus. of ins. shall refuse to give to the Commissioner full and truthful information and response in writing to any inquiry or question made in writing by the Commissioner relating to the bus. of ins. as carried on by such person, then such person so refusing, and for each refusal, shall forfeit and pay to the people of this State the sum of 500 dols. The collection of such forfeitures and payment thereof may be enforced by the Commissioner, and for that purpose suits may be instituted in the name of the people of the State of California, in any court of competent jurisdiction.
In the States of Illinois, Iowa, Massachusetts, Michigan, Missouri, and New York, the investigation may be carried so far as to value every life policy issued ; and in some cases it is even compulsory on the department so to value the policies at stated periods. ACTUARIAL MAGAZINE.-In 1868 Mr. Herschel Filipowski commenced the pub. of a
periodical under this title. It purports to contain orig. Tables relating to life contingencies, vital statistics, int. and discount, and kindred subjects not before pub. The following is a list of the contents of the numbers which have already appeared; the Tables being numbered consecutively :
I. Showing the annual from the single prem. for an Assu. of £100. From 3 to 10 p.c.
II. Deferred annuities on single Lives. Equitable experience, 3 p.c. By Benjamin Hall Todd.
V. Single prem. for an Endow. Assu. of £1. English Life Table II., 3 & 4 p.c. H. Filipowski.
IX. The present value of £1 annuity + 1, interpolated for months. Carlisle
X. Showing the age at which a policy may become payable in consideration of an annual bonus of £1, for quinquennial periods. Carlisle 3 p.c.
XI. & XII. Artificial logarithms, showing the amount of reversionary bonus in lieu of an Endow. Assu.
XIII. D and N columns and Annuities. New experience tables 3 p.c. Ungraduated.
XV. The value of a policy the premium just due, after being in force from 1 to 50 years, with monthly corrections. Carlisle 4 p.c. By Mr. Filipowski.
XVI. The value of a policy as above.
XX. The value of a policy of £100, after being in force any number of years and months, including
XXII. Commutation Columns, Annuities, Single and Annual Prems. for Assu. New experience 3 p.c.
ACTUARIAL REPORT.-The Assu. Cos. Act, 1870, by sec. 7, provides as follows:
Every company shall, once in every five years, if established after the passing of this Act, and once every ten years if established before the passing of this Act, or at such shorter intervals as may be prescribed by the instrument constituting the company, or by its regulations or bye-laws, cause an investigation to be made into its financial condition by an actuary, and shall cause an abstract of the report of such actuary to be made in the form prescribed in the fifth Schedule to this Act.
The 5th Schedule of the Act is as follows:
STATEMENT respecting the VALUATION of the LIABILITIES under LIFE POLICIES and ANNUITIES of the to be made by the Actuary. (The answers should be numbered to accord with the numbers of the corresponding questions.) 1. The date up to which the valuation is made.
2. The principles upon which the valuation and distribution of profits among the policy-holders are made, and whether these principles were determined by the instrument constituting the company, or by its regulations or bye-laws, or otherwise.
3. The table or tables of mortality used in the valuation.
4. The rate or rates of interest assumed in the calculations.
5. The proportion of the annual premium income (if any) reserved as a provision for future expenses and profits. (If none, state how this provision is made.)
6. The consolidated revenue account since the last valuation, or, in case of a company which has made no valuation, since the commencement of the business. (This return should be made in the form annexed.)
7. The liabilities of the company under life policies and annuities at the date of the valuation, showing the number of policies, the amount assured, and the amount of premiums payable annually under each class of policies, both with and without participation in profits; and also the net liabilities and assets of the company, with the amount of surplus or deficiency. (These returns should be made in the forms annexed.)
8. The time during which a policy must be in force in order to entitle it to share in the profits.
(1.) The total amount of profit made by the company.
(2.) The amount of profit divided among the policy-holders, and the number and amount of the policies which participated.
(3.) Specimens of bonuses allotted to policies for £100 effected at the respective ages of twenty, thirty, forty, and fifty, and having been respectively in force for five years, ten years, and upwards, at intervals of five years respectively, together with the amounts apportioned under the various modes in which the bonus might be received.
The forms required by the preceding Schedule are the following:
(FORM referred to under heading No. 6 in the Fifth Schedule.) CONSOLIDATED REVENUE ACCOUNT of the
£ s. d.
Expenses of management...
Other payments(accounts to be specified)
(FORM referred to under heading No. 7 in Fifth Schedule.) SUMMARY and VALUATION of the POLICIES of the
The Act further provides (sec. 8):
Net yearly premiums, if ascertained.
(FORM referred to under heading No. 7 in Fifth Schedule.) VALUATION BALANCE-SHEET of
£ s. d.
Net yearly premiums, if computed.
Total of the results
The term "extra premium" in this Act shall be taken to mean the charge for any risk not provided for in the minimum contract premium. If policies are issued in or for any country at rates of premium deduced from tables other than the European mortality tables adopted by the Company, separate schedules similar in form to the above must be furnished.
CR. £ s. d. By life assurance and annuity funds (as per balance-sheet under Schedule 2 or 4)...
By deficiency, if any
8. Every company shall, on or before the thirty-first day of December, 1872, and thereafter within nine months after the date of each such investigation as aforesaid into its financial condition, prepare a statement of its life assurance and annuity business in the form contained in the sixth schedule to this Act, each of such statements to be made up as at the date of the last investigation, whether such investigation be made previously or subsequently to the passing of this Act. Provided as follows:(1.) If the next financial investigation after the passing of this Act of any company fall during the year 1873, the said statement of such company shall be prepared within nine months after the date of such investigation, instead of on or before the thirty-first day of December, 1872. (2.) If such investigation be made annually by any company, such company may prepare such statement at any time, so that it be made at least once in every three years. The expression "date of each such investigation" in this section shall mean the date to which the accounts of each company are made up for the purposes of each such investigation.
The "Sixth Schedule " is as follows:
STATEMENT of the LIFE ASSURANCE and ANNUITY BUSINESS of the
(The answers should be numbered to accord with the numbers of the corresponding questions. Statements of re-assurances corresponding to the statements in respect of assurances, under headings 2, 3, 4, 5, and 6, are to be given.)
1. The published table or tables of premiums for assurances for the whole term of life which are in use at the date above mentioned.
2. The total amount assured on lives for the whole term of life, which are in existence at the date above mentioned, distinguishing the portions assured with and without profits, stating separately the total reversionary bonuses, and specifying the sums assured for each year of life from the youngest to the oldest ages.
3. The amount of premiums receivable annually for each year of life, after deducting the abatements
made by the application of bonuses, in respect of the respective assurances mentioned under heading No. 2, distinguishing ordinary from extra premiums.
4. The total amount assured under classes of assurance business, other than for the whole term of life, distinguishing the sums assured under each class, and stating separately the amount assured with and without profits, and the total amount of reversionary bonuses.
5. The amount of premiums receivable annually in respect of each such special class of assurances mentioned under heading No. 4, distinguishing ordinary from extra premiums.
6. The total amount of premiums which has been received from the commencement upon all policies under each special class mentioned under heading 4 which are in force at the date above mentioned. 7. The total amount of immediate annuities on lives, distinguishing the amounts for each year of life. 8. The amount of all annuities other than those specified under heading No. 7, distinguishing the amount of annuities payable under each class, the amount of premiums annually receivable, and the amount of consideration money received in respect of each such class, and the total amount of premiums received from the commencement upon all deferred annuities.
9. The average rate of interest at which the life assurance fund of the company was invested at the close of each year during the period since the last investigation.
10. A table of minimum values (if any) allowed for the surrender of policies for the whole term of life and for endowments and endowment assurances, or a statement of the method pursued in calculating such surrender values, with instances of its application to policies of different standing and taken out at various interval ages from the youngest to the oldest.
Separate statements to be furnished for business at other than European rates, together with a statement of the manner in which policies on unhealthy lives are dealt with.
ACTUARIAL SOCIETY OF EDINBURGH.-This So. was founded in 1856, on the occasion of a secession from the Institute of Actuaries of Gt. Brit. of most of the Scotch members. The So. embodies all the leading actuaries of Scotland, and in 1868 received a Charter of Incorp. under the title of FACULTY OF ACTUARIES IN SCOTLAND, under which head will be found a more detailed notice.
ACTUARIAL TABLES.-These are of several classes, as Tables of Simple and Compound Int., Tables of Annuities, and Tables of Logarithms. But what may be regarded as coming more closely within the scope of this definition, are Tables of money-values deduced from the combined effects of int. and prob., especially as connected with the duration of human life. We propose here to give a chronological list of Tables answering more particularly to the last definition; adding such observations as seem essential. We believe no such list has been heretofore compiled. Observations and criticisms on the Mort. Tables will be given when we treat of those Tables; and the proper rate of int. to be assumed under given circumstances will be discussed under INTEREST, RESERVE, VALUATIONS, etc. A chronological list of Tables of LOGARITHMS will be given hereafter.
Tables of Int. were pub. at a very early date, but the earliest we need note here are those pub. by "John Smart, at the Town Clerk's Office, Lond.," in 1707, viz. :
Tables of Simple Int. and Discount at 3, 4, 5, 6, 7, 8, 9, and £10 p.c. p.a. ; also Tables of Compound Int., whereby the amount or present value of any sum of money, or any annuity, or other yearly payment, etc., for any number of years not exceeding one hundred is readily found. (See again 1726.)
In 1725 Abraham De Moivre, F.R.S., pub. the first ed. of his Treatise of Annuities on Lives, and thereto was appended a Table: The present value of an annuity of one pound for any number of years not exceeding 100. Int. at 5 p.c. This Table was founded on the Breslau Mort.
In 1726 Smart pub. 2nd ed. of his Tables, and therein was contained " a Table to calculate the value of annuities upon lives." But this Table was constructed on a plan the very reverse of more modern Tables. It was made to show, not how long the annuitant might be expected to live-but how long he must live in order to be reimbursed the value of his purchase-money.
In 1727 Mr. Richard Hayes pub. a new method for valuing annuities upon lives, showing at sight as follows: 1. How many years, months, etc., purchase an annuity upon life, for any age from 30 to 73 years, is worth, when money yields 4, 5, 6, 7, or 8 p.c. int. 2. How much a year £100 is worth upon life for any of the above ages, etc. 3. How many years an annuitant must live to receive the value of the money sunk, etc., etc.
In 1742 Mr. Thomas Simpson pub. The Doctrine of Annuities and Reversions, deduced from general and evident principles, with useful Tables showing the values of single and joint lives, etc., at different rates of int., etc. These Tables were deduced from the Lond. Tables of Mort.
In 1747 Mr. James Hodgson pub. The Valuation of Annuities upon Lives deduced from the Lond. Bills of Mort., wherein was contained Tables of values at 3, 4, and 5 p.c. p.a.
In 1751 Mr. Weyman Lee pub. (appended to his work on annuities) Tables of the value of Annuities and Leases certain, for years, and for a single life at every age of life, at the rates of 3, 4, 5, and 6 p. c. int.
In 1754 Mr. S. Stonehouse pub. The Valuation of Annuities on Lives deduced from the Lond. Bills of Mort., with several Tables exhibiting at one view the Values of Lives at different rates of Int., and Tables of Compound Int., and of Fines for renewing College Leases, etc.
In 1762 was pub. Dr. Price's famous work: Observations on Reversionary payments, wherein he gave various Tables, mostly Simpson's, based upon the Lond. Bills of Mort.
In 1772 Dale's Calculations, deduced from first principles, was pub. The Tables included therein were Simpson's and others.